Auto insurance can feel simple on the surface—pay your premium, stay insured, and file a claim when you need it. But many drivers unknowingly make mistakes that leave them underinsured, overpaying, or frustrated during a claim. This guide breaks down the most common auto insurance mistakes and how to avoid them so you can stay protected and save money at the same time.
Not Comparing Quotes From Multiple Insurers
One of the biggest mistakes people make is sticking with the same insurer year after year without checking prices elsewhere. Rates can change dramatically based on:
- Updated risk models
- New discounts
- Life changes
- Shifts in driving patterns
- Local market changes
Getting at least three quotes once a year ensures you’re not overpaying.
Choosing the Minimum State Coverage
Many drivers opt for state-minimum insurance to save money, but this often leads to huge out-of-pocket expenses after an accident.
State minimums rarely cover:
- Moderate or major accidents
- High medical bills
- Newer vehicle repairs
- Multi-vehicle collisions
Experts recommend much higher liability limits such as 100/300/50.
Not Understanding Deductibles
Your deductible directly impacts your premium.
- High deductible: Lower monthly premium
- Low deductible: Higher monthly premium
Many drivers choose a deductible they can’t actually afford during a claim. Before finalizing your policy, confirm you can realistically pay your deductible out-of-pocket.
Forgetting to Update a Policy After Life Changes
Many drivers forget to update their insurance after:
- Moving to a new ZIP code
- Getting married
- Adding a teen driver
- Buying a new car
- Changing jobs or commute patterns
These changes can affect both your coverage and your premium. Always update your insurer promptly.
Ignoring Optional Coverages That Provide Major Value
Skipping optional coverages is another common mistake.
Valuable add-ons include:
- Comprehensive (covers theft, fire, weather, vandalism)
- Collision (covers your vehicle repairs after an accident)
- Uninsured/underinsured motorist (very important in states with low minimums)
- Rental reimbursement
- Roadside assistance
- Gap insurance (essential for new cars with loans)
Optional coverages often cost only a few dollars more each month but can save you thousands.
Misreporting Annual Mileage
Some drivers guess their annual mileage or underestimate it intentionally. This can lead to:
- Incorrect pricing
- Potential claim disputes
- Policy issues
Provide an honest estimate and update it if your commute changes.
Not Taking Advantage of Available Discounts
People leave money on the table by forgetting to ask about:
- Bundling (auto + home/renters)
- Safe driver
- Good student
- Military
- Low mileage
- Defensive driving courses
- Anti-theft devices
- Paperless billing
- Automatic payments
- Telematics programs
A quick discount review can lower your premium significantly.
Failing to Document Vehicle Condition
Before an accident happens, drivers should:
- Photograph vehicle condition
- Keep maintenance records
- Keep receipts for upgrades
- Note mileage regularly
Documentation makes claims smoother and avoids disputes.
Not Shopping After a Ticket or Accident Drops Off
Tickets, points, and accidents fall off your record in 2–3 years (depending on your state). Many drivers continue paying inflated premiums simply because they never re-shop their rates after incidents clear.
Filing Claims When It’s Cheaper Not To
Some drivers file small claims that:
- Barely exceed the deductible
- Trigger premium increases
- Affect future underwriting
Smart rule of thumb: If repairs cost only slightly above your deductible, consider paying out-of-pocket.
Letting Coverage Lapse
Even a short lapse can:
- Increase your premium by 20–50%
- Limit your available insurers
- Be illegal in many states
- Cause major financial risk
Set reminders for renewal dates to avoid interruptions.